Visa Defends Signature Debit Practices Scorned in Wal-Mart Suit

Visa responded to a lawsuit brought this week by Wal-Mart, defending the practice of having shoppers sign for debit-card purchases and saying that's what consumers prefer to do.

Visa, the world's largest payments network, stands by its policy of letting consumers choose whether to verify a debit transaction with a signature or a PIN, said Stephanie Ericksen, vice president of global risk products.

"We really want consumers to make that choice and decide what payment works best for them, whether that's a card or a phone or a PIN or a signature," Ericksen said in a telephone interview. "Visa cardholders have been able to choose whether or not they complete their purchases by signing or entering a PIN in the mag-stripe world and there's nothing that should change as we move to chip."

As the U.S. continues its transition to chip-card technology, retailers have complained about rising fees for debit-card payments. Wal-Mart, based in Bentonville, Arkansas, objects to the use of signatures instead of the so-called chip-and-PIN protocol, arguing that the practice Visa encourages is less secure. The world's largest retail chain sued Visa in New York state court on Tuesday, seeking at least $5 billion in damages.

"Visa has acknowledged in many other countries that chip-and-PIN offer greater security," Wal-Mart spokesman Randy Hargrove said in a statement on Tuesday. "Visa nevertheless has demanded that we allow fraud-prone signature verification for debit transactions in our U.S. stores because Visa stands to make more money processing those transactions."

Visa said that almost 90 percent of its debit cardholders say it should be their choice, according to a survey conducted by the Foster City, California-based company this year. While most Visa cardholders do use a PIN when paying with a debit card, almost half have concerns about doing so, the survey found.